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Showing posts with label protectionism. Show all posts
Showing posts with label protectionism. Show all posts

Wednesday, 25 January 2017

The world must wake up from its 2008 depression... in time.

Although the current period since 2008 is still called “The Great Recession” and last century’s period during the interbellum is the only one considered to be “The Great Depression”, there seem to be no really big differences at all between both periods in time.

That is except for the emergence of the Twentieth Century’s  utterly ruthless leaders, like German Reichskanzler Adolf Hitler, Japanese emperor Hirohito and the Soviet Union’s supreme leader Josif Stalin. These undisputed “strong men” – in case of Hirohito the invisible leaders behind him – threw their own countries and others into extremely bloody (domestic) wars, with unimaginable bloodshed in numerous countries and the ultimate deployment of the world’s most feared weapon to this day, the atomic bomb.

It has not come this far yet and we all hope that it never will, but the global signs should be enough to raise the stormball. So let’s call the current period for what it is: a depression and a nasty one indeed.

Again there seems to be an extremely poisonous cocktail of brutal nationalism, ubiquitous distrust and lack of international cooperation between countries, protectionist tendencies and (sometimes) sheer hatred against (religious) minorities inside and outside our own borders. A mixture that is flavoured with a mounting desire among populations for strong leaders who impose their will upon the domestic minorities, as well as the rest of the world, instead of negotiating with them for their fair share of political and economic privileges, trade and wealth.

While the normal streetlife in The Netherlands – and probably other countries too – is still pretty “normal” and people are mostly friendly, empathic and polite against one another, spending a few hours on Twitter and other social media is enough to see how the situation is deteriorating rapidly in the social interactions. Many people are angry..., furious..., even outraged... and almost everyone of those angry people has become it, coming from his own personal stance and worldview.

There is no understanding for each other’s position and background anymore and people are simply disqualified, in case they don’t belong to the winning group at their home turf. Diplomacy is at best performed with the megaphone of shouting and usage of CAPITALS in every written statement. “Nuances and shades of grey are soft and we are not soft on softness anymore. We are soft on nothing and no-one. Black & white, aka good & bad, are the colours of choice!”.

And please don’t think that the newly elected American president Donald Trump is the only one, who administers his narrow world vision by megaphone and CAPITALS.

Since the Brexit has become the chosen option in former PM David Cameron’s dreaded referendum, there is a strong increase in the number of official / unofficial hostilities against immigrants and EU citizens from f.i. Poland, but also The Netherlands.

On top of that, the leaders of the most prominent populist parties in The Netherlands, Germany and France even felt confident enough to pose with each other on a large picture that was published all over Europe.

No more cautious restraint for these parties anymore: the election victory of President Donald Trump felt like their own victory, as if the victory in their national elections cannot escape from them anymore. And the national polls of today seem to work in their favour, in The Netherlands and France.

And the Dutch Prime Minister Mark Rutte seems to agree with them too: in order to beat the populist Dutch Party for Freedom, Mark Rutte deemed it necessary to put a one-page advertisement in all large daily newpapers in The Netherlands, in which he asked everybody “who could not act normal” to “take a hike” away from The Netherlands.

Even though his cheap attempt towards hijacking the populist vote was met with scornful laughter and sheer amazement from the opposition, it is a tell-tale signal how low the political situation has sunk in The Netherlands, that the Prime Minister must turn to such draconic measures.

Suffice it to mention the situation in Russia and the Ukraine, but also in Hungary and Poland, or China and the Philippines and the view emerges of a world that tries to fight its depression with a display of sheer aggression against other countries and domestic / foreign population groups (i.e. refugees), with the United States agitator-in-chief Donald Trump as the latest (and perhaps most dangerous) populist star in the galaxy.

Suddenly trade wars loom between the United States and about every other industrialized country and political block in the world: about rejected treaties and trade agreements, newly imposed trade barriers, import levies and mandatory production lines in the United States for foreign brands, who want to maintain their business in the US.

But there is also acrimony between the new US government and environmentalists about strongly polluting oil pipelines or between the United States and China about a few small islands in the South Chinese sea and the natural wealth that these islands possess.

Not even to mention the current situation between the US, Europe and Ukraine and Russia, coming from a decade of mounting tensions in Europe. Or the Arab Spring, which is rather akin to an Arab Winter.

It is as the famous sage Frances Coppola states on Twitter: “Trade wars have a tendency to become real wars”. And that is a scary, yet not very implausible concept.

Tweet by economist and twitter sage
Frances Coppola (@Frances_Coppola)
Click to enlarge
Where the world seems more firmly in the grasp of populists every day, it is paramount to realize that their siren’s song is counterproductive and dangerous; no matter how seductive it sounds.

It is time for the world to finally wake up from this 9-year depression and learn the valuable lessons from the situation in the interbellum, that led to the Second World War. 

Please wake up, everybody, and smell the coffee! Before it’s too late!

Tuesday, 24 January 2017

The European Union is dealt with the worst possible hand in its poker game against “Vicious Vladimir” Putin, Xi “the sfinx” Jinping and Donald “the Trumpinator” Trump, but must not lose its game in order to stay in the match.

In the noble game of poker it is not paramount that someone wins with a good hand.
But how he prevents himself from losing while being dealt with a really bad hand...
Ernst Labruyère - 21 januari 2017 

“Alea iacta est – the die is cast” as Gaius Julius Caesar is believed to have said in 49 BC. Donald Trump IS now the 45th president of the United States and WILL decide the future policy of the most important partner that the EU has. And when his maiden speech as president is a text book example for his policy in the coming years, the EU might be in for a very wild ride.


The call for an assertive Europe has been sounding louder and louder during the last couple of weeks. Reality is, however, that the European Union is hardly capable of fiercely rebutting Donald Trump’s statements. The new POTUS knows the weakness of its European interlocutors.

The European dependence of the US is simply too big – especially with regards to European strategic security – and even though the European consumer market is much bigger than the American domestic market: when the United States sneeze, the European Union almost immediately catch a cold! The EU could take Trump’s words to heart and do something about its own incapability. Yet, reality bites and the stakes are high that the EU is in worse shape next year than now already is the case.

This is an extraordinarily straightforward editorial from this (mostly) liberal-conservative newspaper and an extremely worthy one for thorough consideration. Where the interests of the European continent lay traditionally in the relation with the United States, this might come to a sudden end with the election of “elephant in the china shop” Donald Trump, who left little doubt about the direction of his policy: “America first... and second... and third”.


‘America first, America first.’ Donald Trump stated it twice, on purpose, during his historical inauguration speech. He did not even have to raise his voice to let the populistic message sink in easily. With Trump at the helm, the military and economic powerhouse seemingly wants to draw back behind its own borders.

The businessman painted the USA as a brutally robbed nation, helplessly whirling in a bloodbath.’We must protect our borders against the devastation coming from other countries, who make our products, steal our companies and destroy our jobs. Protection will lead to great wealth and power”. Every decision regarding trade, taxes, immigration and foreign affairs will come to the benefit of American workers and families, is promised by Trump.

The 70 year-old New Yorker established America as a loser on all fronts. “Many dozens of years we enriched the foreign industry, at the expense of the American industry. We enriched other countries, while the wealth, the power and the confidence of our country disappeared behind the horizon. The wealth of our middle classes is robbed and redivided all over the world”

At least there is not much opaqueness anymore whether President Donald Trump would be akin to Republican candidate Donald Trump in his presidential statements or that he would lower his tone of voice. Trump has entered the job like a raging bull with his horns forward, threatening to pierce and squeeze anybody standing in his way; beginning with the (mostly extremely docile) American press.

This caused a shock among the European leaders, who all hoped that President Trump would be a soft-focused version of his “Republican candidate appearance” during the whole election time. Still an elephant, but one with soft, fluffy socks on. No, Trump isn’t cuddly and he probably won’t ever be either.

While – since the start of the financial crisis in 2008 – the European Union could get away with acting like “28 (now 27) frogs in a wheelbarrow” without too much irreversible political damage, it seems that playtime is now over in world politics.

And so the European Union, represented by “Frogwrangler in chief”  Chancellor Angela Merkel of Germany – undoubtedly the unelected leader of the European Union and by far the most influentional European politician – finds itself back in an high-stakes poker game, playing at a table with “Vicious Vladimir” Putin, Xi “the Sfinx” Jinping and Donald “the Trumpinator” Trump. And during the last thirty-odd years  the stakes have probably never been higher...

“Vicious Vladimir”, the Russian chessplayer, has the winning strategy and the bluff, as he showed in the Ukraine, Syria and Turkey as well as in his interference with the American elections; “Xi the Sfinx” has the patience, inconspicuousness and determination of the leader of an empire with a horizon of centuries, instead of days.

And “the Trumpinator”? He carries all the weapons and uses blunt force while playing to make his point.

Current second rate players like Geert Wilders (PVV), Marine le Pen (FN) and Frauke Petry (AfD) – who are not yet very significant – wait for their opportunity to appear in the limelight, to stir things up even more for the European Union. They all want to hijack the cash at the table and probably want to hand it out to their fellows and textbook examples Trump and Putin, who they consider to be determined heroes, in contrary to the cautious and reluctant European leaders they hate so much.

At this table is player Theresa “May or May Not” really the dark horse, whose ways are yet unpredictable. At this moment, Theresa May’s role is therefore perhaps the most interesting one.

Will she declare Donald Trump her unconditional love and chew through his rudeness and undisguised, protectionist nationalism, in order to cherish and maintain the special relation between the United States and the United Kingdom? Or will she remind herself that there is so much more that she shares with the current European Union than with the Republican-governed, sometimes really erratic and deeply religious United States, with their political bluntness and their disdain for real problems on earth, like the mounting fossile pollution, the expanding droughts and the soaring number of other climate-related incidents.

Even though the latter would make more sense, it seems not unlogic when she chooses to love the US unconditionally: at every price. The price for herself losing this high-stakes pokergame would be that the United Kingdom would sink into economic oblivion, as a consequence of disdain and negligence by both the European Union and the United States. This would probably lead it into the willing arms of China, in order to act as an unresisting bridgehead to Europe.

One thing is certain: Europe must get its act together and must do so quickly. It must improve its pan-European defence apparatus – inside, but also outside the NATO – and it must really invest in an independent, political defence strategy, as they can’t automatically rely on the goodwill and obvious benevolence of the United States of America anymore (i.e. as if they could ever...). The times of the EU as a spineless follower of US foreign policy should really be a thing of the past.

This also means that the EU must think about serious economic countermeasures against brutal American protectionism, further abolishment of important trade deals and mindless American climate policies that Trump might establish in the coming months and years.

Trump must be made clear that corporate imperialism has always been a two-way street during the last few centuries and that many American companies – like Nike, Apple, Facebook, Google, Uber and AirBnB and to a lesser degree General Motors and Ford – have reached near-monopolies at the expense of local, European Asian and African companies and millions of people all over the world.

And that Trump perhaps should not risk THEIR position on the huge European single market... Besides that, were it not the American companies themselves who massively outsourced their production jobs to the low-wage countries on their way to higher profits and higher shareholder satisfaction?! No European or Asian leader forced those companies to produce everything in China, Bangladesh or Mexico! Really! If Donald Trump wants to blame somebody for that, please look to “the man in the mirror” and his predessors!

But also the European Union must choose a viable, balanced stance in the mounting tensions between the United States and China regarding both the Spratly Islands and Taiwan-gate.

China must be warned (or else...) that it must not take its territorial aspirations too far in the South-Chinese seas “simply because they can” and brutally force other countries out of their way, but the United States must be warned too that the job of “policeman of the world” is not obviously theirs anymore.

The trust between Europe, Asia, the Arab world, Africa at one hand and the US at the other currently shows some serious dents, after too many failed attempts in nation building of the last few decades; the list of American-enforced political rubble in Asia, Africa and the Middle-East is mounting and mounting, with Afghanistan, Iraq, Iran, Syria and Libya as the most telling examples.

And Europe must make clear to Vladimir Putin that the current European borders must be respected at all costs and that he must stop his deployment of fuzzy intelligence tactics in Europe, but that Europe wants to improve the relations between the EU and Russia in the immediate future [as this would be a sensible thing to do – EL]. The same goes for the relations between the European Union and Turkey; inside the NATO and as a partner of the EU with too many common interests to quarrel about everything.

All in all, this sounds almost like a mission impossible to which even Tom Cruise could eat his heart out. But it is a mission that the European Union has to undertake in order to not become the victim in this high-stakes pokergame and lose its credibility in the world.

As I said in the beginning statement of this article: In the noble game of poker it is not paramount that someone wins with a good hand. But how he prevents himself from losing while being dealt with a really bad hand... 

It is obvious that Europe has the bad hand indeed, but they nevertheless have to deal with it! 

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